Revisiting The Red Line Rule By: Gabriel PotterMBA, AIFA® 2016.04.26
Warning:  today’s blog post is entirely self-serving.  In a previous blog post “Thinking About Frontier Markets”, I made an argument that you can measure the sophistication of a country’s social contract between government, institutions and its citizens by the acceptance of traffic laws.  I note, with only a little bit of smugness, that James O’Malley of CityMetric independently had the same idea and backed it up with data.  I am happy to ride on the coattails of someone else’s hard work, so feel free to check out his conclusions HERE.  

To be entirely fair, Mr. O’Malley’s data suggests a correlation, not causation.  In his own correction, he concedes that the data may suggest a measurement of trust between people rather than government institutions, but the general point still stands.  Obedience to traffic laws is a good measure of an accepted social contract.  
Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

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